KR Choksey's research report on ICICI Bank
Net interest income (NII) increased by 23% YoY to INR 1,22,360 Mn in Q3FY22 from INR 99,125 Mn in Q3FY21. The net interest margin was 3.98% in Q3FY22 vs 3.67% in Q3FY21. Core operating profit (profit before provisions and tax, excluding treasury income) grew by 25% YoY in Q3FY22. Non-interest income, excluding treasury income, grew by 25% YoY. Fee income grew by 19% YoY to INR 42,910 Mn in Q3FY22. Provisions (excluding provision for tax) declined by 27% YoY to INR 20,073 Mn in Q3FY22. The profit after tax grew by 25.4% YoY to INR 61,938 Mn in Q3FY22 compared to INR 49,396 Mn in Q3FY21. Total deposits increased by 16% YoY and 4% sequentially to INR 1,01,74,667 Mn while advances grew 16.4% YoY at INR 81,39,916 Mn as on 31st December 2021. Net NPA ratio declined from 0.99% as on Sept 30, 2021, to 0.85% as of December 2021. The capital adequacy ratio was 19.79%.
Since our last update, the shares of ICICI Bank have appreciated by ~8%. We have applied a P/ABV multiple of 2.5x to the FY24E ABV of INR 316 per share, implying a SOTP valuation of INR 955 per share (unchanged). It has a potential upside of 19.6% at the CMP of INR 798 per share. As a result, we maintain our “BUY" rating on ICICI Bank's shares.